Rocket Lab Announces First Quarter 2023 Financial Results, Issues Guidance For Continued Growth In Second Quarter 2023
Long Beach, California. May 9, 2023 – Rocket Lab USA, Inc. (Nasdaq: RKLB) (“Rocket Lab” or “the Company”), a global leader in launch services and space systems, today shared the financial results for fiscal first quarter 2023, ended March 31, 2023.
Rocket Lab founder and CEO, Peter Beck, said: “Rocket Lab started the year strong with three successful Electron missions in the first quarter across our global launch facilities and to date, remains the only commercial U.S. small launch vehicle to successfully deliver satellites to orbit in 2023. At a time when we’re starting to see a contraction of available small rockets, we’re also seeing an increase in launch bookings for Electron launches in 2023 and beyond from new and returning customers across government and commercial sectors. The development of our larger rocket Neutron is continuing at pace with launch and testing facilities expanded, engine hardware being printed at our headquarters in Long Beach, and vehicle hardware in production for upcoming structural tests throughout the year that we expect will keep the program on track. Space Systems also continues its strong performance, with the majority of our products supporting customer missions across several launches in the quarter, and major program milestones reached on Photon spacecraft build programs for government and commercial customers.”
First Quarter 2023 Business Highlights:
- Delivered financial results that exceeded the high end of prior guidance for revenue and gross margin.
- Launched three successful Electron missions in the first quarter for commercial constellation operators HawkEye 360, Capella Space, and BlackSky.
- Successfully completed the Company’s first launch from its U.S. launch site, Rocket Lab Launch Complex 2, at the Virginia Spaceport Authority’s Mid-Atlantic Regional Spaceport on January 24, 2023. The mission deployed three satellites for radio frequency geospatial analytics provider HawkEye 360.
- Successfully completed the Company’s fastest turnaround between launches to date – just seven days between its 34th Electron launch, “Stronger Together”, from Rocket Lab Launch Complex 2 in Virginia on March 16, 2023, and its 35th Electron launch, “The Beat Goes On”, from Rocket Lab Launch Complex 1 in New Zealand on March 24, 2023.
- Rocket Lab remains the only U.S. commercial small launch provider to successfully deliver satellites to orbit in 2023.
- Secured a multi-mission contract with Capella Space to launch four more dedicated launches on Electron in 2023.
- Achieved programmatic milestones for the Company’s two Photon spacecraft to support NASA’s ESCAPADE mission to Mars, and for the Photon spacecraft for a Varda Space Industries’ mission to manufacture high-value products in zero gravity. Both Photon programs include Rocket Lab star trackers, reaction wheels, solar panels, flight software, and radios – demonstrating the value and strength of the Company’s vertical integration and in-house supply chain.
Business Highlights Since March 31, 2023:
- Successfully deployed two satellites to space for NASA’s TROPICS mission on the first of two dedicated launches on Electron for the constellation scheduled in May 2023.
- Secured another NASA mission to Electron’s 2023 launch manifest with its Starling mission. Rocket Lab was selected by NASA to launch the Starling mission on an expedited timeline due to long delays and uncertainty with the mission’s original launch provider.
- Signed multiple new launch contracts on Electron for 2023 for undisclosed commercial satellite customers previously manifested on another small launch vehicle, demonstrating Electron’s strong position as a reliable and dependable ride to orbit for small satellite operators.
- Introduced Rocket Lab’s new HASTE launch vehicle, a suborbital testbed launch vehicle derived from the Company’s Electron rocket to provide reliable, high-cadence flight test opportunities to support the development of advanced hypersonic systems technology.
- Announced that the Company will fly a pre-launched 3D printed Rutherford engine on an upcoming mission in Q3’23, a major step in evolving the Electron launch vehicle into a reusable rocket.
Second Quarter 2023 Guidance
For the second quarter of 2023, Rocket Lab expects:
- Revenue between $60 million and $63 million.
- Launch Services revenue of approximately $23 million.
- Space Systems revenue of between $37 million to $40 million.
- GAAP Gross Margins between 14% to 16%.
- Non-GAAP Gross Margins between 22% to 24%.
- GAAP Operating Expenses between $55 million to $57 million.
- Non-GAAP Operating Expenses between $41 million to $43 million.
- Expected Interest Expense (Income), net $1 million.
- Adjusted EBITDA loss of $22 million to $24 million.
- Basic Shares Outstanding of 480 million.
See “Use of Non-GAAP Financial Measures” below for an explanation of our use of Non-GAAP financial measures, and the reconciliation of historical Non-GAAP measures to the comparable GAAP measures in the tables attached to this press release.We have not provided a reconciliation for the forward-looking Non-GAAP Gross Margin, Non-GAAP Operating Expenses or Adjusted EBITDA expectations for Q2 2023 described above because, without unreasonable efforts, we are unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate these non-GAAP financial measures, particularly related to stock-based compensation and its related tax effects. Stock-based compensation is currently expected to range from $14 million to $15 million in Q2 2023.
Conference Call Information
Rocket Lab held a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) May 9, 2023 to discuss these business highlights and financial results for our first quarter, to provide our outlook for the second quarter, and other updates.
A replay of the webcast is available on Rocket Lab’s Investor Relations website: https://investors.rocketlabusa.com/events-and-presentations/events
About Rocket Lab
Founded in 2006, Rocket Lab is an end-to-end space company with an established track record of mission success. We deliver reliable launch services, satellite manufacture, spacecraft components, and on-orbit management solutions that make it faster, easier and more affordable to access space. Headquartered in Long Beach, California, Rocket Lab designs and manufactures the Electron small orbital launch vehicle and the Photon satellite platform and is developing the Neutron launch vehicle for large spacecraft and constellation deployment. From its first orbital launch in January 2018 to date, Rocket Lab’s Electron launch vehicle has become the second most frequently launched U.S. rocket annually and has delivered 161 satellites to orbit for private and public sector organizations, enabling operations in national security, scientific research, space debris mitigation, Earth observation, climate monitoring, and communications. Rocket Lab’s Photon spacecraft platform has been selected to support NASA missions to the Moon and Mars, as well as the first private commercial mission to Venus. Rocket Lab has three launch pads at two launch sites, including two launch pads at a private orbital launch site located in New Zealand and a third launch site in Virginia, USA. To learn more, visit www.rocketlabusa.com.
+ Rocket Lab Investor Relations Contact
+ Rocket Lab Media Contact
+ FORWARD LOOKING STATEMENTS
This press release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, contained in this press release, including statements regarding our expectations of financial results for the second quarter of 2023, strategy, future operations, future financial position, projected costs, prospects, plans and objectives of management, are forward-looking statements. Words such as, but not limited to, “anticipate,” “aim,” “believe,” “contemplate,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “suggest,” “strategy,” “target,” “will,” “would,” and similar expressions or phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are based on Rocket Lab’s current expectations and beliefs concerning future developments and their potential effects. These forward-looking statements involve a number of risks, uncertainties (many of which are beyond Rocket Lab’s control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including risks related to delays and disruptions in expansion efforts; our dependence on a limited number of customers; the harsh and unpredictable environment of space in which our products operate which could adversely affect our launch vehicle and spacecraft; increased congestion from the proliferation of low Earth orbit constellations which could materially increase the risk of potential collision with space debris or another spacecraft and limit or impair our launch flexibility and/or access to our own orbital slots; increased competition in our industry due in part to rapid technological development and decreasing costs; technological change in our industry which we may not be able to keep up with or which may render our services uncompetitive; average selling price trends; failure of our launch vehicles, spacecraft and components to operate as intended either due to our error in design in production or through no fault of our own; launch schedule disruptions; supply chain disruptions, product delays or failures; design and engineering flaws; launch failures; natural disasters and epidemics or pandemics; changes in governmental regulations including with respect to trade and export restrictions, or in the status of our regulatory approvals or applications; or other events that force us to cancel or reschedule launches, including customer contractual rescheduling and termination rights; risks that acquisitions may not be completed on the anticipated time frame or at all or do not achieve the anticipated benefits and results; and the other risks detailed from time to time in Rocket Lab’s filings with the Securities and Exchange Commission (the “SEC”), including under the heading “Risk Factors” in Rocket Lab’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on March 7, 2023, and elsewhere. There can be no assurance that the future developments affecting Rocket Lab will be those that we have anticipated. Except as required by law, Rocket Lab is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Notes to Editor: All dollar amounts in this press release are expressed in U.S. dollars, unless otherwise stated.
+ USE OF NON-GAAP FINANCIAL MEASURES
We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (“GAAP”) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company's ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Reconciliation of the non-GAAP financial information to the corresponding GAAP measures for the historical periods disclosed are included at the end of the tables in this press release. We have not provided a reconciliation for forward-looking non-GAAP financial measures because, without unreasonable efforts, we are unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate these non-GAAP financial measures, particularly related to stock-based compensation and its related tax effects. The following definitions are provided:
+ ADJUSTED EDITDA
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income or loss to determine Adjusted EBITDA. Management believes this measure provides investors meaningful insight into results from ongoing operations.
+ OTHER NON-GAAP FINANCIAL MEASURES
Non-GAAP gross profit, research and development, net, selling, general and administrative, operating expenses, operating loss and total other income (expense), net, further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from the applicable GAAP financial measure. Management believes these non-GAAP measures provide investors meaningful insight into results from ongoing operations.